##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 0-21714
 CSB Bancorp, Inc.
 (Exact name of registrant as specified in its charter)
 Ohio
    
    34-1687530(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification Number)
 91 North Clay, P.O. Box 232, Millersburg, Ohio 44654
  (Registrants telephone number)
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  o þ
  Common stock, $6.25 par value
    
    Outstanding at May 9, 2008:2,440,850 common shares




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##### 



PagePart I  Financial InformationITEM 1 - FINANCIAL STATEMENTS (Unaudited)Consolidated Balance Sheets
    
    3Consolidated Statements of Income
    
    4Consolidated Statements of Changes in Shareholders Equity
    
    5Condensed Consolidated Statements of Cash Flows
    
    6Notes to the Consolidated Financial Statements
    
    7ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    10ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    14ITEM 4 - CONTROLS AND PROCEDURES
    
    15Part II  Other InformationITEM 1   Legal Proceedings
    
    161A  Risk Factors
    
    162   Unregistered Sales of Equity Securities and Use of Proceeds
    
    163   Defaults upon Senior Securities
    
    164   Submission of Matters to a Vote of Security Holders
    
    165   Other Information
    
    166   Exhibits
    
    17Signatures
    
    18EX-11EX-31.1EX-31.2EX-32.1EX-32.2




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March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCash and due from bank
    
    $
    10,445,660
    
    
    $
    12,111,807Interest-earning deposits in other banks
    
    
    40,052
    
    
    
    81,555Federal funds sold
    
    
    14,300,000
    
    
    
    Total cash and cash equivalents
    
    
    24,785,712
    
    
    
    12,193,362Securities available-for-sale, at fair value
    
    
    63,243,672
    
    
    
    71,419,830Restricted stock, at cost
    
    
    3,142,900
    
    
    
    3,105,900Total securities
    
    
    66,386,572
    
    
    
    74,525,730Loans
    
    
    246,983,893
    
    
    
    256,659,059Less allowance for loan losses
    
    
    2,690,830
    
    
    
    2,585,901Net loans
    
    
    244,293,063
    
    
    
    254,073,158Premises and equipment, net
    
    
    7,235,361
    
    
    
    7,273,238Accrued interest receivable and other assets
    
    
    2,107,609
    
    
    
    2,204,257Total Assets
    
    $
    344,808,317
    
    
    $
    350,269,745LIABILITIESDepositsNoninterest-bearing
    
    $
    38,665,336
    
    
    $
    46,038,976Interest-bearing
    
    
    208,364,076
    
    
    
    213,347,066Total deposits
    
    
    247,029,412
    
    
    
    259,386,042Short-term borrowings
    
    
    24,604,161
    
    
    
    27,305,157Other borrowings
    
    
    33,875,513
    
    
    
    26,023,888Accrued interest payable and other liabilities
    
    
    2,151,610
    
    
    
    1,276,610Total liabilities
    
    
    307,660,696
    
    
    
    313,991,697SHAREHOLDERS EQUITYCommon stock, $6.25 par value: Authorized 9,000,000
shares; issued 2,667,786 shares
    
    
    16,673,667
    
    
    
    16,673,667Additional paid-in capital
    
    
    6,455,819
    
    
    
    6,452,319Retained earnings
    
    
    18,552,852
    
    
    
    17,990,445Treasury stock at cost: 226,936 shares in 2008 and
220,162 shares in 2007
    
    
    (4,712,735
    )
    
    
    (4,599,282
    )Accumulated other comprehensive income (loss)
    
    
    178,018
    
    
    
    (239,101
    )Total shareholders equity
    
    
    37,147,621
    
    
    
    36,278,048Total Liabilities and Shareholders Equity
    
    $
    344,808,317
    
    
    $
    350,269,745
  3.




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Three Months EndedMarch 31,2008
    
    
    2007Interest incomeLoans, including fees
    
    $
    4,412,704
    
    
    $
    4,314,520Taxable securities
    
    
    804,622
    
    
    
    750,057Nontaxable securities
    
    
    43,878
    
    
    
    68,511Other
    
    
    22,207
    
    
    
    13,194Total interest income
    
    
    5,283,411
    
    
    
    5,146,282Interest expenseDeposits
    
    
    1,427,758
    
    
    
    1,553,362Short-term borrowings
    
    
    199,042
    
    
    
    Other
    
    
    276,846
    
    
    
    337,628Total interest expense
    
    
    1,903,646
    
    
    
    1,890,990Net interest income
    
    
    3,379,765
    
    
    
    3,255,292Provision for loan losses
    
    
    107,032
    
    
    
    78,005Net interest income after provision
for loan losses
    
    
    3,272,733
    
    
    
    3,177,287Non-interest incomeService charges on deposit accounts
    
    
    287,152
    
    
    
    275,471Trust and financial services
    
    
    188,664
    
    
    
    169,638Credit card fee income
    
    
    64,052
    
    
    
    63,447Debit card interchange
    
    
    70,821
    
    
    
    53,982Gain on sale of credit cards
    
    
    261,072
    
    
    
    Other income
    
    
    83,725
    
    
    
    83,563Total non-interest income
    
    
    955,486
    
    
    
    646,101Non-interest expensesSalaries and employee benefits
    
    
    1,536,903
    
    
    
    1,407,180Occupancy expense
    
    
    197,881
    
    
    
    184,553Equipment expense
    
    
    125,450
    
    
    
    115,918State franchise tax
    
    
    107,430
    
    
    
    101,338Professional and director fees
    
    
    139,556
    
    
    
    141,382Other expenses
    
    
    621,239
    
    
    
    669,505Total non-interest expenses
    
    
    2,728,459
    
    
    
    2,619,876Income before income taxes
    
    
    1,499,760
    
    
    
    1,203,512Federal income tax provision
    
    
    498,000
    
    
    
    389,000Net income
    
    $
    1,001,760
    
    
    $
    814,512Basic and diluted earnings per share
    
    $
    0.41
    
    
    $
    0.33
  4.




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Three Months EndedMarch 31,2008
    
    
    2007Balance at beginning of period
    
    $
    36,278,048
    
    
    $
    35,070,320Comprehensive income:Net income
    
    
    1,001,760
    
    
    
    814,512Change in net unrealized
gain, net of reclassification
adjustments and related
income tax benefit of $214,879
and $59,265, respectively
    
    
    417,119
    
    
    
    115,045Total comprehensive income
    
    
    1,418,879
    
    
    
    929,557Issuance of 40 shares from treasury
    
    
    
    
    
    
    641Stock-based compensation expense
    
    
    3,500
    
    
    
    11,250Purchase of treasury shares
    
    
    (113,453
    )
    
    
    (653,222
    )Cash dividends declared
($0.18 per share in
2008 and 2007)
    
    
    (439,353
    )
    
    
    (443,320
    )Balance at end of period
    
    $
    37,147,621
    
    
    $
    34,915,26
  5.




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Three Months EndedMarch 31,2008
    
    
    2007Net cash from operating activities
    
    $
    1,216,242
    
    
    $
    896,368Cash flows from investing activitiesSecurities available-for-sale:Proceeds from maturities, calls and repayments
    
    
    22,403,914
    
    
    
    1,331,608Purchases
    
    
    (13,611,007
    )
    
    
    (167,061
    )Purchase of FHLB stock
    
    
    (37,000
    )
    
    
    Proceeds from sale of other real estate
    
    
    105,000
    
    
    
    10,000Loan originations, net of repayments
    
    
    7,446,531
    
    
    
    (3,234,547
    )Proceeds from sale of credit cards
    
    
    2,513,671
    
    
    
    Net change in loans held for sale
    
    
    
    
    
    
    (241,000
    )Premises and equipment expenditures, net
    
    
    (125,547
    )
    
    
    (171,964
    )Net cash provided by (used for) investing activities
    
    
    18,695,562
    
    
    
    (2,472,964
    )Cash flows from financing activitiesNet change in deposits
    
    
    (12,356,630
    )
    
    
    (6,646,411
    )Net change in short-term borrowings
    
    
    (2,700,996
    )
    
    
    (3,334,306
    )Proceeds from other borrowings
    
    
    8,000,000
    
    
    
    5,000,000Repayment of other borrowings
    
    
    (148,375
    )
    
    
    (174,111
    )Purchase of treasury shares
    
    
    (113,453
    )
    
    
    (653,222
    )Issuance of treasury shares
    
    
    
    
    
    
    641Cash dividends paid
    
    
    
    
    
    
    Net cash (used for) financing activities
    
    
    (7,319,454
    )
    
    
    (5,807,409
    )Net change in cash and cash equivalents
    
    
    12,592,350
    
    
    
    (7,384,005
    )Cash and cash equivalents at beginning of period
    
    
    12,193,362
    
    
    
    17,653,188Cash and cash equivalents at end of period
    
    $
    24,785,712
    
    
    $
    10,269,183Supplemental disclosuresInterest paid
    
    $
    1,918,857
    
    
    $
    1,911,848Income taxes paid
    
    
    
    
    
    
    250,000Non-cash investing activity-transfer of loans to OREO
    
    
    
    
    
    
    59,096
  6.




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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 7.




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NOTE 2  SECURITIES
  March 31, 2008
 Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    FairCost
    
    
    gains
    
    
    losses
    
    
    ValueAvailable-for-sale:U.S. Treasury security
    
    $
    99,953
    
    
    $
    2,742
    
    
    $
    
    
    
    $
    102,695Obligations of U.S.
government
corporations and agencies
    
    
    7,000,000
    
    
    
    64,400
    
    
    
    
    
    
    
    7,064,400Mortgage-backed securities
    
    
    50,862,757
    
    
    
    360,711
    
    
    
    88,362
    
    
    
    51,135,106Obligations of states and
political subdivisions
    
    
    4,609,484
    
    
    
    90,250
    
    
    
    24,992
    
    
    
    4,674,742Total debt securities
    
    
    62,572,194
    
    
    
    518,103
    
    
    
    113,354
    
    
    
    62,976,943Equity Securities
    
    
    401,752
    
    
    
    779
    
    
    
    135,802
    
    
    
    266,729Total available-for-sale
    
    
    62,973,946
    
    
    
    518,882
    
    
    
    249,156
    
    
    
    63,243,672Restricted stock
    
    
    3,142,900
    
    
    
    
    
    
    
    
    
    
    
    3,142,900Total securities
    
    $
    66,116,846
    
    
    $
    518,882
    
    
    $
    249,156
    
    
    $
    66,386,572
 December 31, 2007
 Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    FairCost
    
    
    gains
    
    
    losses
    
    
    ValueAvailable-for-sale:U.S. Treasury security
    
    $
    99,944
    
    
    $
    1,704
    
    
    $
    
    
    
    $
    101,648Obligations of U.S.
government
corporations and agencies
    
    
    25,498,979
    
    
    
    18,190
    
    
    
    7,904
    
    
    
    25,509,265Mortgage-backed securities
    
    
    42,682,972
    
    
    
    15,639
    
    
    
    333,666
    
    
    
    42,364,945Obligations of states and
political subdivisions
    
    
    3,098,457
    
    
    
    60,088
    
    
    
    
    
    
    
    3,158,545Total debt securities
    
    
    71,380,352
    
    
    
    95,621
    
    
    
    341,570
    
    
    
    71,134,403Equity Securities
    
    
    401,752
    
    
    
    665
    
    
    
    116,990
    
    
    
    285,427Total available-for-sale
    
    
    71,782,104
    
    
    
    96,286
    
    
    
    458,560
    
    
    
    71,419,830Restricted stock
    
    
    3,105,900
    
    
    
    
    
    
    
    
    
    
    
    3,105,900Total securities
    
    $
    74,888,004
    
    
    $
    96,286
    
    
    $
    458,560
    
    
    $
    74,525,730
 8.




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NOTE 3  FAIR VALUE MEASUREMENTS (FAS NO. 157)
  Level I:
    
    Quoted prices are available in active markets for identical
assets or liabilities as of the reported date.Level II:
    
    Pricing inputs are other than quoted prices in active markets,
which are either directly or indirectly observable as of the
reported date. The nature of these assets and liabilities
include items for which quoted prices are available but traded
less frequently, and items that are fair valued using other
financial instruments, the parameters of which can be directly
observed.Level III:
    
    Assets and liabilities that have little to no pricing
observability as of the reported date. These items do not have
two-way markets and are measured using managements best
estimate of fair value, where the inputs into the determination
of fair value require significant management judgment or
estimation.
  March 31, 2008Level I
    
    Level II
    
    Level III
    
    Total(In thousands)Assets:Securities available for sale
    
    $
    266,729
    
    
    $
    62,976,943
    
    
    $
    
    
    
    $
    63,243,672
 9.




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ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING STATEMENTS
   FINANCIAL CONDITION
   10.




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March 31, 2008
    
    December 31, 2007
    
    March 31, 2007Non-performing loans
    
    
    431,000
    
    
    
    571,000
    
    
    
    1,536,000Other real estate
    
    
    
    
    
    
    101,700
    
    
    
    49,100Allowance for loan losses
    
    
    2,690,800
    
    
    
    2,585,900
    
    
    
    2,654,700Total loans
    
    
    246,983,900
    
    
    
    256,659,100
    
    
    
    235,576,900Allowance: loans
    
    
    1.09
    %
    
    
    1.01
    %
    
    
    1.13
    %Allowance: non-performing loans
    
    
    6.2x
    
    
    
    4.5x
    
    
    
    1.7x
      11.




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RESULTS OF OPERATIONS
 Three months ended March 31, 2008 and 2007
      12.




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CAPITAL RESOURCES
  LIQUIDITY
  OFF-BALANCE SHEET ARRANGEMENTS
  13.




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March 31 2008
 Changes inInterest Rates
    
    Net Interest
    
    Dollar
    
    Percentage(basis points)
    
    Income
    
    Change
    
    Change(Dollars in Thousands)+200
    
    $
    14,667
    
    
    $
    884
    
    
    
    6.4
    %+100
    
    
    14,212
    
    
    
    429
    
    
    
    3.10
    
    
    13,783
    
    
    
    0
    
    
    
    0.0-100
    
    
    13,449
    
    
    
    (334
    )
    
    
    (2.4
    )-200
    
    
    13,027
    
    
    
    (756
    )
    
    
    (5.5
    )
 December 31, 2007
 Changes inInterest Rates
    
    Net Interest
    
    Dollar
    
    Percentage(basis points)
    
    Income
    
    Change
    
    Change(Dollars in Thousands)+200
    
    $
    14,682
    
    
    $
    506
    
    
    
    3.6
    %+100
    
    
    14,457
    
    
    
    281
    
    
    
    2.00
    
    
    14,176
    
    
    
    0
    
    
    
    0.0-100
    
    
    13,988
    
    
    
    (188
    )
    
    
    (1.3
    )-200
    
    
    13,646
    
    
    
    (530
    )
    
    
    (3.7
    )
 14.




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ITEM 4  CONTROLS AND PROCEDURES
     CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
  15.




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ITEM 1  LEGAL PROCEEDINGS
  
 ITEM 1A   RISK FACTORS
  
 ITEM 2  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  ssuer Purchase of Equity Securities
 MaximumTotal Number of
    
    Number of SharesTotal Number
    
    Average
    
    Shares Purchased
    
    that May Yet beof Shares
    
    Price Paid
    
    as Part of Publicly
    
    Purchased UnderPeriod
    
    Purchased
    
    Per Share
    
    Announced Plans
    
    the PlanJanuary 1, 2008 to
January 31, 2008
    
    None
    
    None
    
    None
    
    
    67,111February 1, 2008 to
February 29, 2008
    
    
    6,774.04
    
    
    $
    16.75
    
    
    
    6,774.04
    
    
    
    60,337March 1, 2008 to
March 31, 2008
    
    None
    
    None
    
    None
    
    
    60,337
  
 Item 3  Defaults Upon Senior Securities:
  
 Item 4  Submission of Matters to a Vote of Security Holders
  
 Item 5  Other Information:
  16.




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Item 6  Exhibits:
 ExhibitNumber
    
    Description of Document3
    .1
    
    Amended Articles of Incorporation of CSB Bancorp, Inc. (incorporated by reference to Registrants Form 10-KSB for the Fiscal Year
ended December 31, 1994)3
    .1.1
    
    Amended form of Article Fourth of Amended Articles of Incorporation, as effective April 9, 1998 (incorporated by reference
to Registrants Form 10-K for the Fiscal Year ended December 3, 1998)3
    .2
    
    Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrants Form 10-SB)4
    
    
    Specimen stock certificate (incorporated by reference to Registrants Form 10-SB)11
    
    
    Statement Regarding Computation of Per Share Earnings (reference
is hereby made to Consolidated Statements of Income on page 4 hereof.)31
    .1
    
    Rule 13a-14(a)/15d-14(a) CEOs Certification31
    .2
    
    Rule 13a-14(a)/15d-14(a) CFOs Certification32
    .1
    
    Section 1350 CEOs Certification32
    .2
    
    Section 1350 CFOs Certification
 17.




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CSB BANCORP, INC.
(Registrant)Date: May 9, 2008
    /s/ Eddie L. SteinerEddie L. SteinerPresident
Chief Executive OfficerDate: May 9, 2008
    /s/ Paula J. MeilerPaula J. MeilerSenior Vice President
Chief Financial Officer 18.




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##### Table of Contents



Exhibit
    
    
    
    SequentialNumber
    
    Description of Document
    
    Page11
    
    Statement Regarding Computation of Per Share Earnings
(reference is hereby made to Consolidated Statements of Income on
page 4 hereof.)31.1
    
    Rule 13a-14(a)/15d-14(a) CEOs Certification31.2
    
    Rule 13a-14(a)/15d-14(a) CFOs Certification32.1
    
    Section 1350 CEOs Certification32.2
    
    Section 1350 CFOs Certification
 19.